- XLM price is forming a ledge pattern under the 100 twelve-hour moving average and neckline.
- Bullish hammer pattern triggered yesterday, but commitment proved fleeting.
- No bullish momentum divergences to galvanize hopes for a sustained rebound.
XLM price busted the neckline of a head-and-shoulders top pattern on April 22 and quickly plunged below the 100-day simple moving average (SMA) before attracting bids and propelling higher. The bearish thesis first outlined in an April 20 FXStreet article remains viable given the price hesitation following the bullish hammer pattern triggered on April 23.
XLM price boredom today masks internal warfare
The last three major corrections have averaged around 50%, and two of the three were short, lasting four and nine days, respectively. Based on the Stellar head-and-shoulders pattern measured move target of $0.304, it forecasts a loss of just over 50% from the April 13 high.
A decline of that magnitude would drive the daily Relative Strength Index (RSI) into oversold territory (below 30), proclaiming a momentum low for the correction and the basis for a new, long-term rally. Without it, Stellar will be challenged to complete recovery to new highs.
It is important to briefly mention that momentum lows do not always coincide with price lows. In fact, price lows are often established days or even weeks after the momentum low.
The path to the measured move target of $0.304 includes the April 23 hammer low at $0.390, the rising trendline from the February 22 low at $0.372, and the February low at $0.314.
To review, at the measured move target, Stellar will be down 30% from the current price at $0.431, 34% from the neckline of the head-and-shoulders top pattern, and 55% from the April 13 high at $0.690. Perhaps, most importantly, if the February low is breached, it will break the series of higher lows for XLM price corrections and thrust the digital coin’s bullish speculators into a long waiting game.
XLM/USD 12-hour chart
Cryptocurrencies are known to surprise, stressing the need to define resistance levels for Stellar. Already in play, the 100 twelve-hour SMA at $0.456 is significant, closely followed by the neckline at $0.463. If the token closes above the neckline, it raises the odds of a test of the 50 twelve-hour SMA at $0.514. The meeting of Fibonacci levels at $0.545 stands in the way of a test of the all-time high at $0.690, which also corresponds to the 461.8% Fibonacci extension of the 2019-2020 bear market.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Prisma price tanks 25% after nearly $9 million exploit
Prisma Finance (PRISMA) is being exploited, and the attacker has so far pulled $9 million in Ethereum from the borrowing protocol. Prisma asked vault owners to take the necessary steps to protect funds from the ongoing attack in an official tweet on X.
Meme coins gain traction after SEC’s partial win in Coinbase lawsuit: DOGE, SHIB, BRETT, POPCAT, BODEN
US SEC pocketed a partial win in its lawsuit against Coinbase, ushering a correction in crypto prices on Thursday. Despite the broad pullback, prices of meme coins like Dogecoin, Shiba Inu and Solana-based BRETT, POPCAT and BODEN increased.
Ondo moves $95 million worth of OUSG assets to BUIDL as tokenized fund attracts $245 million since debut
Ondo Finance (ONDO) announced on Wednesday that it's shifting about $95 million worth of its OUSG's underlying assets to the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
XRP price stuck below $0.65 resistance, Ripple lawsuit could suffer from Coinbase defeat
XRP price falls slightly to $0.61 on Thursday after its landmark programmatic sales ruling in July, which gave Ripple a partial victory against the US SEC, failed to reverberate in a similar legal battle between the regulator and crypto exchange Coinbase.
Bitcoin: BTC may have recovered, but is it out of the woods?
Bitcoin’s (BTC) upward momentum has shown a significant decline for the past two weeks or so. This development led to a bearish signal on the weekly and an uncertain outlook on the monthly.